While foreign brands such as McDonald's are flourishing, DIY and home-improvement businesses such as IKEA find that many Chinese are browsing to get ideas, not to buy
Two announcements from global high-street chains last weekput into sharp focus the reality that success in China cannot be taken for granted.
The economy might be vast and growing at a breathless pace, but the "Chinese characteristics" that the country often speaks of mean bumper profits enjoyed overseas are sometimes difficult to replicate in the local economy.
The fast-food chain McDonald's said a few days ago it was looking to open as many as 200 restaurants in China next year, to add to 165 openings on the mainland this year. The company's restaurant tally in the country is already a supersized 1,100, two decades after those famous golden arches made their first appearance in Shenzhen in the south.
It is an astonishing pace of development. Yet, remarkably, it is exceeded by the growth of KFC, which with its buckets of chicken pieces has, unlike in other markets, stolen a march on Ronald McDonald and his burgers.
But even if it trails its arch-rival, McDonald's still enjoys a hefty presence in the world's most populous nation.
The success of both chains has spawned countless local competitors, many of them focusing more on Chinese food but using the low-cost, fast-food model of almost identical restaurants that KFC and McDonald's have used to such effect. Some local brands have upwards of 200 restaurants in the country but seem unlikely to challenge the big hitters from overseas.
A second expansion announcement last week showed that in other sectors, western retail chains can find life much tougher going.
The Swedish furniture retailer IKEA said it was looking to double the number of stores it has in China over the next five years. This sounds impressive but is less so when you consider that IKEA currently has a modest eight stores in China, 12 years after opening its first in the country.
Of course, a home furnishing chain that specialises in vast superstores is never going to rival a fast-food brand in terms of store numbers.
But IKEA's store tally does in a sense reflect wider difficulties that do-it-yourself and home-improvement chains have had in China.
IKEA has had to cut margins drastically to drum up business, while the British chain B&Q has found life even tougher going in China. Last year, after posting losses of millions of pounds in China, it announced it was closing or downsizing almost 40 stores, about two thirds of its total.
It is all the more surprising given China's property boom, with many people enjoying the chance to own their home for the first time and moving into much bigger apartments than their parents could have dreamed of. The foreign home-furnishing chains should be raking it in.
Yet cut-throat competition from the tens of thousands of local "aggregators" that sell a variety of brands under one roof is said to have made life difficult for the big chains from abroad.
There have also been reports that customers have enjoyed the hospitality of the large furnishing chain stores and then gone home with only ideas and a set of measurements to find a carpenter to make a cheaper version of what was on display in the showrooms.
Having said that, given IKEA's current prices in China - a coffee table now costs little more than a cup of coffee in Starbucks - it is hard to imagine there are many savings to be made by ordering a locally made copy.
It could not be more different from the fast-food sector, where it is the western chains that hold sway over their Chinese counterparts, not the other way around.
One overall lesson from the contrasting fortunes in China of the foreign chains in the two sectors is that local market characteristics can make the difference between success and failure.
China offers vast and growing opportunities, just ask McDonald's and KFC, but the best-laid plans by well-managed foreign chains can be turned upside down by China-specific factors, as anyone faced with the formidable task of turning a profit at a DIY store in the country can attest.
business@thenational.ae
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
Formula%204%20Italian%20Championship%202023%20calendar
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
CREW
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
The specs: 2019 Mercedes-Benz C200 Coupe
Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
Company%20Profile
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How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
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A%20QUIET%20PLACE
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More on Quran memorisation:
Mina Cup winners
Under 12 – Minerva Academy
Under 14 – Unam Pumas
Under 16 – Fursan Hispania
Under 18 – Madenat
